E-commerce firm, Jumia is at present enmeshed in a case of inside fraud involving its internet affiliate marketing programme, in any other case often known as J-Pressure.
The alleged fraud, purportedly working into billions of naira, can also be stated to have attracted the eye of the Financial and Monetary Crimes Fee (EFCC). Confidential sources reveal that some workers of Jumia could have been picked up for questioning by the anti-graft company. This was after a number of the brokers concerned started to petition the Fee.
Jumia’s internet affiliate marketing programme purportedly affords people an opportunity to earn cash by way of commissions on gross sales of the corporate’s merchandise. Moreover, the Jumia web site confirms the existence of the scheme. It states: “Get on the JForce prepare right now and earn cash by way of commissions by promoting objects equipped by Jumia. It’s also possible to earn a living as you recruit new gross sales consultants. This is a chance to be your personal boss and take orders from nobody else however your self as you could have full management over your actions.”
Nonetheless, bother began when Jumia started to position an embargo on the accounts of a few of its brokers. Investigations reveal that the corporate had detected some type of insider fraud and collusion between the entrepreneurs and retailers. A supply disclosed that brokers on Jumia’s Affiliate Programme normally take pleasure in juicy commissions, usually greater than Jumia’s margins on merchandise. In consequence, a few of them started colluding with retailers to position fictitious product orders, working into hundreds of thousands with a view to brow-beat the corporate and earn heavy commissions.
The ugly growth led to Jumia slowing down its internet affiliate marketing programme in latest months. Following the suspension of numerous accounts, brokers are actually accusing Jumia of ripping them off their entitlements.
Efforts to hunt clarification from Jumia by way of e-mail have remained unsuccessful.
One of many brokers, who spoke on situation of anonymity, disclosed that some brokers earn as much as N40m month-to-month in commissions. The agent added that different entrepreneurs could have earned far more, even he decried the actions of the corporate.
“This suspension of accounts has been occurring for some time however I by no means knew it might occur to me. Often, as an agent, you’ll be able to log into the Jumia Associates Dashboard to test the standing of your commissions. Nonetheless, I seen that each one my commissions had been frozen.
“From my enquiries, I found that I used to be not the one one affected. Jumia has been doing the identical factor to different hard-working Nigerians who put of their effort to work for them. I attempted contacting their Buyer Service and all I used to be being advised doesn’t make sense to me. They promised to research and later advised me that each one the orders I positioned have been JForce orders. It is a clear case of fraud.”
One other agent disclosed that the motion of the corporate was a calculated motion to disclaim entrepreneurs of the large commissions they’d generated.
Their declare that each one the orders positioned have been JForce orders which most of us don’t know what JForce is all about is in itself fraudulent on their half. Apparently, Jumia has seen that affiliate entrepreneurs are making a lot cash from the programme. Perhaps they will’t afford to pay it after which they’re in search of an excuse. Everybody wants to affix palms with us and say sufficient is sufficient.”
Jumia had beforehand admitted vendor fraud and fraudulent transactions with authentic shoppers on its platform. In a prospectus filed with the USA Securities and Change Fee (SEC) earlier than its NYSE IPO, Jumia disclosed that sellers are additionally partaking in fictitious or “phantom” transactions with themselves or collaborators with a view to artificially inflate their very own rankings on its platform, construct their repute and search outcomes rankings.
Furthermore, the corporate appears helpless in controlling this menace.
Jumia revealed that though it had carried out numerous measures to detect and cut back the prevalence of fraudulent actions on its platform, there may be no assurance that such measures can be efficient in combating fraudulent transactions or bettering total satisfaction amongst sellers, shoppers and different contributors.
As well as, the corporate reported that thugs broke into its warehouses in Kenya in late 2018, and stole merchandise with a worth of roughly €500,000.
The foregoing calls into sharp reduction the claims by Citron, an intelligence fairness analysis firm, that Jumia’s IPO was based mostly on falsehood and ‘nugatory’.
Within the preamble to the report, Citron stated:
“In 18 years of publishing, Citron has by no means seen such an apparent fraud as Jumia. Because the media within the US is naively anointing Jumia the “Amazon of Africa”, the media in its residence nation of Nigeria has a plethora of articles discussing the widespread fraud on this Nigerian firm. Not even that elusive Nigerian prince can cowl this one up.
Jumia is the worst abuse of the IPO system because the Chinese language RTO fraud growth nearly a decade in the past. Worse than being “the most costly” US-listed e-commerce firm, Jumia reported financials to indicate us a stagnant enterprise that has burned by way of $1 billion and has moved the sucker’s sport to the US Markets.”